Asian Paints Shares Slide 7% After Q3 FY26 Results, Profit Hit By ₹158 Crore Exceptional Costs & Weak Demand Outlook

Mumbai: Shares of Asian Paints fell sharply on Wednesday, January 28, a day after the company announced its Q3 FY26 results. The stock dropped as much as 7 percent to a low of Rs 2,451 on the NSE. From recent levels, the share price is now down over 9.3 percent, reflecting investor disappointment with earnings and demand trends.

Profit declines due to one-time expenses

Asian Paints reported a 4.83 percent year-on-year fall in consolidated net profit at Rs 1,073.92 crore for the December quarter of FY26. The decline was mainly due to exceptional expenses of Rs 157.61 crore.

These included a Rs 63.74 crore one-time charge linked to higher gratuity liability after the new labour code and a Rs 93.87 crore impairment loss on intangibles related to its White Teak acquisition.

Revenue grows, but pace remains modest

Despite the profit drop, revenue from operations rose 3.71 percent to Rs 8,867.02 crore, compared with Rs 8,549.44 crore a year earlier. Total expenses increased 3.12 percent year-on-year to Rs 7,447.07 crore, broadly in line with revenue growth.

Importantly, profit before exceptional items and tax grew 8.46 percent to Rs 1,646.70 crore, showing that the core business remained steady before one-off costs.

Analysts flag weak demand trends

Analysts at HSBC said Q3 FY26 saw disappointing volume and revenue growth, with weak retail demand likely to persist for some time. While margins were strong, HSBC cautioned that risks for FY27 earnings are tilted to the downside.

CLSA cuts earnings estimates

Brokerage CLSA said Asian Paints revenue growth was around 2 percent below expectations. Standalone volume growth of 7.9 percent was helped by a weak base and festive demand.

The company has guided for mid-single-digit sales growth in the near term and high single-digit volume growth. However, CLSA has cut FY26–FY28 earnings estimates by up to 7 percent, citing slower demand recovery despite strong gross margins supported by softer raw material costs.

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